Diffusion, peer pressure, and tailed distributions.

We present a general, physically motivated nonlinear and nonlocal advection equation in which the diffusion of interacting random walkers competes with a local drift arising from a kind of peer pressure. We show, using a mapping to an integrable dynamical system, that on varying a parameter the steady-state behavior undergoes a transition from the standard diffusive behavior to a localized stationary state characterized by a tailed distribution. Finally, we show that recent empirical laws on economic growth can be explained as a collective phenomenon due to peer pressure interaction.